Market Overview

At 03:31 ET (07:31 GMT) the FTSE 100 edged higher, up 0.17%, as investors turned their focus to the Bank of England’s upcoming interest‑rate decision. In contrast, Germany’s DAX slipped 0.42% and France’s CAC 40 rose 0.62%. The pound weakened 0.05%, trading at $1.3340 per dollar.

Commodity and Currency Movements

Brent crude advanced 0.86% to $88.85 a barrel, while U.S. WTI crude gained 1.02% to $85.31. Gold futures rose 0.14% to $4,041.80, though spot gold fell 0.54% to $4,044.41.

Geopolitical Context

The United States resumed air strikes on Iran, ending a brief pause, with CENTCOM reporting a “heavy wave of strikes” against IRGC targets, missile and drone sites, and coastal defences. All Iranian missiles were intercepted. Iran’s IRGC navy claimed to have “targeted and stopped” three oil tankers in the Strait of Hormuz. A drone strike hit the U.S.-owned LNG storage vessel Energos Winter at Egypt’s Damietta port; Egypt’s petroleum ministry confirmed a fire but no casualties. U.S. President Donald Trump warned Tehran would be hit “very hard” and expressed disappointment if China supplied arms to Iran.

U.S. Federal Reserve Decision

The Fed kept its policy rate in the 3.50‑3.75% range, with three regional presidents dissenting for an immediate 25‑basis‑point hike. Chair Kevin Warsh said the committee sought stability, noting a “large majority” opted to hold rates. ING analysts expect the Fed to maintain rates through 2027, citing softer jobs data, cooling shelter costs, and tariff refunds cushioning corporate America. ING also anticipates Trump pushing for a diplomatic deal to reopen the Strait of Hormuz ahead of the U.S. mid‑term elections.

Bank of England Outlook

Investors are awaiting the BoE’s decision later Thursday, with market consensus leaning toward leaving borrowing costs unchanged.

Corporate Updates

  • Lloyds Banking Group reported first‑half pretax profit that beat expectations and unveiled a three‑year strategy aiming for a ~20% return on tangible equity by 2030, driven by retail‑banking growth and AI‑enabled cost efficiencies.
  • Shell plc posted second‑quarter adjusted earnings that more than doubled year‑on‑year, surpassing market forecasts thanks to higher oil and gas prices, robust LNG and oil trading, and improved chemicals margins, despite lower sales volumes in Qatar.
  • Rolls‑Royce Holdings plc raised its full‑year profit guidance well above market expectations after delivering a 46% rise in first‑half operating profit, supported by stronger civil‑aerospace aftermarket performance, heightened defence demand, and solid data‑centre orders.
  • BAE Systems plc upgraded its 2026 outlook after first‑half operating profit beat expectations, citing strong defence demand and continued global military spending supporting its order book.
  • Anglo American plc more than halved its first‑half loss, increased its dividend, and progressed its restructuring programme. The company’s proposed $53 billion merger with Teck Resources remains pending final approval from Chinese regulators.
  • London Stock Exchange Group plc lifted its 2026 margin outlook and trimmed the lower end of its revenue forecast after first‑half results beat expectations. Higher market volatility boosted trading activity, underpinning growth in its markets business.

Index Movements Recap

  • FTSE 100: +0.17%
  • DAX: ‑0.42%
  • CAC 40: +0.62%